"Unadulterated greed'

Greed -- the word was used over and over to describe PPL Corp. at a packed, four-hour public hearing Wednesday in south Bethlehem.

John Boyer of Macungie tried to be polite. He said PPL's behavior amounted to "a five-letter word that begins with G and ends in D."

Ed Tremba of Allentown, like most others, didn't beat around the bush: "This is pure and unadulterated greed."

More than 200 people, mostly seniors worried about skyrocketing electric bills, attended the Pennsylvania Public Utility Commission hearing. It was the first such hearing directly related to electricity deregulation since shortly after the state decided to restructure its electric industry in the 1990s.

The focus was PPL's proposed phase-in plan, which would allow customers to begin paying incrementally more for electricity in July

rather than waiting until Jan. 1, 2010. That's when, in the final phase of deregulation, a cap on what PPL can charge for electricity generation is due to expire and rates are expected to surge 34 percent for residents and up to 43 percent for some businesses.

Jerry Green, president of United Steelworkers Local 2599 in Bethlehem, said such a hike would force some people on fixed incomes to choose between buying food or medicine and paying their electricity bill.

Pierre Morgan of Bethlehem turned to a PPL lawyer and urged him to think about the social implications. "Poverty breeds crime," he said. "I'm not against anyone making a profit, but their profit shouldn't be my debt."

The PPL lawyer did not respond. Outside the hearing, PPL spokesman Dan McCarthy said PPL's phase-in plan is part of the company's effort to help. "We understand, as we have said all along, that there are significant concerns," he said.

Under the phase-in plan, which the PUC is expected to approve this month, residents and some businesses could start making additional payments on their electric bills beginning in July, continuing through the end of 2009. Money from the payments, plus 6 percent interest, would be applied to bills in 2010, 2011 and 2012.

As a result, rates for the average residential customer would go up about 7 percent in both 2008 and 2009, and about 6 percent annually from 2010 through 2012.

"They [at PPL] want to allow us peons to pay more to soften the blow later," scoffed Judith Smullen of Bethlehem.

Susan Sacks of Coplay said prepaying isn't an option for people who already live paycheck to paycheck. "You cannot get water from a stream that has gone dry."

The PUC agreed to hold the hearing at the urging of state Sen. Lisa Boscola, D-Northampton, who has drafted legislation that would block the 2010 hike. She said she wanted to draw attention to the plight of PPL ratepayers.

So many people showed up, the crowd spilled out of the meeting room and into a foyer at Northampton Community College's Fowler Family Southside Center. The administrative law judge conducting the hearing had to ask people with seats to move forward to make standing room for everyone else.

Boscola, greeted with whoops and clapping, kicked off the public testimony by calling the phase-in plan "a back-door attempt by PPL to start collecting deregulated rates now." She was followed by Paul Stewart of Wescosville, who said, "Deregulation of the electric industry has been a failure."

Many of the roughly 50 people who spoke took umbrage with PPL Chief Executive Officer Jim Miller's compensation, which a company financial filing valued at $9.7 million last year.

A number of people had done their homework beforehand. One man quoted from a PPL presentation to financial analysts. Another had printed out graphs he said showed that PPL's profit margin was even higher than Exxon Mobil's.

"Deregulation failed because the basic premise was flawed," said Boyer, the Macungie resident. "Shopping for electricity is not like shopping for cars."

Under pressure from energy companies and some of their biggest industrial customers, Pennsylvania began to deregulate its electric industry in 1996. The change meant the PUC could no longer set electricity prices, as it had for decades. Rather, prices would be determined by the marketplace.

Temporary rate caps were put in place to protect customers from short-term price volatility. Both Boscola and Rep. Camille George, D-Clearfield, have drafted bills that would keep the caps in place for at least two years beyond 2010.

PPL, which opposes the Boscola and George proposals, says the rising cost of coal, oil, natural gas and other power plant fuels have driven up the price of electricity. Extending the caps could force PPL subsidiary PPL Electric Utilities, which serves 1.4 million Pennsylvania customers, into bankruptcy, according to the company.

Critics of the electric industry, on the other hand, argue that fuel cost doesn't fully explain the increase in electricity prices. They accuse energy companies of profiteering from an easy-to-manipulate, uncompetitive market; as proof they point to the companies' earnings.

The subject of PPL's profit -- a record $1.3 billion in 2007, a 51 percent increase over the previous record set just a year earlier -- was repeatedly mentioned at the hearing.

"PPL used to be a benevolent monopoly," Joe Meier of Hellertown said. "Today they are just a greedy monopoly."

THE ISSUE

Deregulation: As a result of the deregulation of the electricity industry, the average residential PPL Electric Utilities customer can expect electric bills to increase by 34 percent in 2010.

Phase-in plan: As an alternative, PPL has proposed letting customers start making additional payments on their electric bills beginning in July and continuing through 2009. Money from those payments, plus interest, would be applied to bills in 2010, 2011 and 2012. As a result, rates would go up about 7 percent in both 2008 and 2009, and about 6 percent annually from 2010 through 2012.